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Investment in Charter Accounted for Using the Equity Method | 6 Months Ended
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Jun. 30, 2025
Investment in Charter Accounted for Using the Equity Method |
Investment in Charter Accounted for Using the Equity Method | (4) Investment in Charter Accounted for Using the Equity Method Through a number of prior years’ transactions, Liberty Broadband has acquired an interest in Charter. The investment in Charter is accounted for as an equity method affiliate based on our voting and ownership interest and the board seats held by individuals appointed by Liberty Broadband. As of June 30, 2025, the carrying and market value of Liberty Broadband’s ownership in Charter was approximately $13.1 billion and $17.8 billion, respectively. We own an approximate 32.0% economic ownership interest in Charter, based on shares of Charter’s Class A common stock issued and outstanding as of June 30, 2025. As discussed in more detail in note 1, Charter has agreed to acquire Liberty Broadband. The Stockholders Agreement and Letter Agreement, as amended by the Stockholders and Letter Agreement Amendment, sets forth certain agreements relating to the governance of Charter and the participation of Liberty Broadband in Charter’s share repurchase program. Pursuant to the Stockholders Agreement, Liberty Broadband’s equity ownership in Charter (on a fully diluted basis) is capped at the greater of 26% or the Voting Cap (as defined below) (the “Equity Cap”). Pursuant to the Stockholders and Letter Agreement Amendment, Liberty Broadband is exempt from the Equity Cap to the extent Liberty Broadband’s equity ownership in Charter exceeds such Equity Cap solely as a result of the repurchase provisions in the Stockholders and Letter Agreement Amendment. In the event the Merger Agreement is terminated, Liberty Broadband’s equity ownership in Charter (on a fully diluted basis) is capped at the greater of the Voting Cap or the percentage of equity owned (on a fully diluted basis) by Liberty Broadband on the termination date of the Merger Agreement. As of June 30, 2025, due to Liberty Broadband’s voting interest exceeding the current voting cap of 25.01% (the “Voting Cap”), our voting control of the aggregate voting power of Charter is 25.01%. Under the Stockholders Agreement and the Stockholders and Letter Agreement Amendment, Liberty Broadband has agreed to vote all voting securities beneficially owned by it, or over which it has voting discretion or control that are in excess of the Voting Cap in the same proportion as all other votes cast by public stockholders of Charter with respect to the applicable matter. In February 2021, Liberty Broadband was notified that its ownership interest, on a fully diluted basis, had exceeded the Equity Cap set forth in the Stockholders Agreement. On February 23, 2021, Charter and Liberty Broadband entered into the Letter Agreement in order to implement, facilitate and satisfy the terms of the Stockholders Agreement with respect to the Equity Cap. Pursuant to the Letter Agreement, following any month during which Charter purchases, redeems or buys back shares of its Class A common stock, and prior to certain meetings of Charter’s stockholders, Liberty Broadband will be obligated to sell to Charter, and Charter will be obligated to purchase, such number of shares of Class A common stock as is necessary (if any) to reduce Liberty Broadband’s percentage equity interest, on a fully diluted basis, to the Equity Cap (such transaction, a “Charter Repurchase”). The per share sale price for each share of Charter will be equal to the volume weighted average price paid by Charter in its repurchases, redemptions and buybacks of its common stock (subject to certain exceptions) during the month prior to the Charter Repurchase (or, if applicable, during the relevant period prior to the relevant meeting of Charter stockholders). Charter Repurchases during the pendency of the proposed Transactions under the Merger Agreement are governed by the Stockholders and Letter Agreement Amendment as described below. Interim Merger Period Stock Repurchases Simultaneously with the execution and delivery of the Merger Agreement, Charter, Liberty Broadband and A/N have entered into an amendment to (i) the Stockholders Agreement, and (ii) the Letter Agreement. The Stockholders Agreement and the Letter Agreement, as amended by the Stockholders and Letter Agreement Amendment, sets forth certain agreements relating to the governance of Charter and the participation of Liberty Broadband in Charter’s share repurchase program. Pursuant to the Stockholders and Letter Agreement Amendment, each month during the pendency of the proposed Transactions under the Merger Agreement, Charter will repurchase shares of Charter Class A common stock from Liberty Broadband in an amount equal to the greater of (i) $100 million and (ii) an amount such that immediately after giving effect thereto, Liberty Broadband would have sufficient cash to satisfy certain obligations as set forth in the Stockholders and Letter Agreement Amendment and Merger Agreement, provided that if any repurchase would reduce Liberty Broadband’s equity interest in Charter below 25.25% after giving effect to such repurchase or if all or a portion of such repurchase is not permitted under applicable law, then Charter shall instead loan to Liberty Broadband an amount equal to the lesser of (x) the repurchase amount that cannot be repurchased and (y) the Liberty Broadband minimum liquidity threshold less the repurchase amount that is repurchased, with such loan to occur on the terms set forth in the Stockholders and Letter Agreement Amendment. From and after the date Liberty Broadband’s 3.125% Debentures due 2053 and 3.125% Debentures due 2054 are no longer outstanding, the amount of monthly repurchases will be the lesser of (i) $100 million and (ii) an amount equal to the sum of (x) an amount such that immediately after giving effect thereto, Liberty Broadband would satisfy certain minimum liquidity requirements as set forth in the Stockholders and Letter Agreement Amendment and (y) the aggregate principal amount outstanding under the Margin Loan Facility. The per share sales price shall be determined as set forth in the Letter Agreement, provided that if Charter has not repurchased shares of its common stock during the relevant repurchase period, the repurchase price shall be based on a Bloomberg Volume Weighted Average Price methodology proposed by Charter and reasonably acceptable to Liberty Broadband. Under the terms of the Stockholders and Letter Agreement Amendment and original Letter Agreement, Liberty Broadband sold 1,634,261 and 343,903 shares of Charter Class A common stock to Charter for $600 million and $116 million during the six months ended June 30, 2025 and 2024, respectively. Subsequent to June 30, 2025, Liberty Broadband sold 254,706 shares of Charter Class A common stock to Charter for $100 million in July 2025. Investment in Charter The excess basis in our investment in Charter is allocated within memo accounts used for equity method accounting purposes as follows (amounts in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | June 30, | ​ | December 31, | ​
​ | ​ | ​ | 2025 | ​ | 2024 | ​
Property and equipment, net |  | $ | 230 | ​ | 280 | ​
Customer relationships, net | ​ |  | 1,716 | ​ | 1,751 | ​
Franchise fees | ​ |  | 3,843 | ​ | 3,843 | ​
Trademarks | ​ |  | 29 | ​ | 29 | ​
Goodwill | ​ |  | 3,661 | ​ | 3,845 | ​
Debt | ​ |  | (166) | ​ | (251) | ​
Deferred income tax liability | ​ |  | (1,413) | ​ | (1,413) | ​
​ | ​ | $ | 7,900 | ​ | 8,084 | ​
​ Property and equipment and customer relationships have weighted average remaining useful lives of approximately 3 years and 6 years, respectively, and franchise fees, trademarks and goodwill have indefinite lives. The excess basis of outstanding debt is amortized over the contractual period using the straight-line method. The decrease in excess basis for the six months ended June 30, 2025 was primarily due to amortization expense during the period, as well as the Company’s participation in Charter’s share buyback program. The Company’s share of earnings (losses) of affiliate line item in the accompanying condensed consolidated statements of operations includes expenses of $66 million and $97 million, net of related taxes, for the three months ended June 30, 2025 and 2024, respectively, and $133 million and $169 million, net of related taxes, for the six months ended June 30, 2025 and 2024, respectively, due to the amortization of the excess basis related to assets with identifiable useful lives and debt. The Company had dilution losses of $15 million and $4 million during the three months ended June 30, 2025 and 2024, respectively, and $33 million and $32 million for the six months ended June 30, 2025 and 2024, respectively. The dilution losses for the periods presented were primarily attributable to the exercise of stock options and restricted stock units by employees and other third parties, partially offset by a gain on dilution related to Charter’s repurchase of Liberty Broadband’s Charter shares during both the six months ended June 30, 2025 and 2024. Summarized unaudited financial information for Charter is as follows: Charter condensed consolidated balance sheets
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | June 30, 2025 | ​ | December 31, 2024 |
​ | ​ | amounts in millions | ​
Current assets | ​ | $ | 4,812 | ​ | 4,233 | ​
Property and equipment, net | ​ |  | 44,187 | ​ | 42,913 | ​
Goodwill | ​ |  | 29,674 | ​ | 29,674 | ​
Intangible assets, net | ​ |  | 68,140 | ​ | 68,437 | ​
Other assets | ​ |  | 4,776 | ​ | 4,763 | ​
Total assets | ​ | $ | 151,589 | ​ | 150,020 | ​
Current liabilities | ​ | $ | 14,556 | ​ | 13,486 | ​
Deferred income taxes | ​ |  | 18,757 | ​ | 18,845 | ​
Long-term debt | ​ |  | 91,863 | ​ | 92,134 | ​
Other liabilities | ​ |  | 6,045 | ​ | 5,848 | ​
Equity | ​ |  | 20,368 | ​ | 19,707 | ​
Total liabilities and shareholders’ equity | ​ | $ | 151,589 | ​ | 150,020 | ​
Charter condensed consolidated statements of operations
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended |  | Six months ended |
​ | ​ | June 30, | ​ | June 30, | ​
​ | ​ | 2025 | ​ | 2024 | ​ | 2025 | ​ | 2024 |
​ | ​ | amounts in millions | ​
Revenue | ​ | $ | 13,766 | ​ | 13,685 | ​ | 27,501 | ​ | 27,364 | ​
Cost and expenses: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Operating costs and expenses (excluding depreciation and amortization) | ​ |  | 8,230 | ​ | 8,173 | ​ | 16,424 | ​ | 16,569 | ​
Depreciation and amortization | ​ |  | 2,176 | ​ | 2,170 | ​ | 4,357 | ​ | 4,360 | ​
Other operating (income) expense, net | ​ |  | 81 | ​ | 79 | ​ | 204 | ​ | 41 | ​
​ | ​ | ​ | 10,487 | ​ | 10,422 | ​ | 20,985 | ​ | 20,970 | ​
Operating income | ​ | ​ | 3,279 | ​ | 3,263 | ​ | 6,516 | ​ | 6,394 | ​
Interest expense, net | ​ |  | (1,263) | ​ | (1,328) | ​ | (2,504) | ​ | (2,644) | ​
Other income (expense), net | ​ | ​ | (107) | ​ | (85) | ​ | (249) | ​ | (174) | ​
Income tax (expense) benefit | ​ |  | (414) | ​ | (427) | ​ | (859) | ​ | (873) | ​
Net income (loss) | ​ | ​ | 1,495 | ​ | 1,423 | ​ | 2,904 | ​ | 2,703 | ​
Less: Net income attributable to noncontrolling interests | ​ | ​ | (194) | ​ | (192) | ​ | (386) | ​ | (366) | ​
Net income (loss) attributable to Charter shareholders | ​ | $ | 1,301 | ​ | 1,231 | ​ | 2,518 | ​ | 2,337 | ​
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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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